The Church Law Group » Tax-exemption

Prove Your Property Tax Exemption!

alicia.baker — Thu, 28 Feb 2013 19:22:12 +0000

Allegheny County in Pennsylvania puts nonprofits on notice:

Facing rising public pressure in a region dominated by tax-exempt giants, Allegheny County soon will require all nonprofits with property to prove they deserve their tax breaks.

At Tuesday’s county council meeting, Executive Rich Fitzgerald announced plans to send letters to all 9,000 non-government tax-exempt properties in the county, demanding proof they’re still in the business of doing good.

It’s the county’s first major effort to double-check property records that officials acknowledge are hopelessly out-of-date, with no way to know if a property bought years ago is still being used for charity.

“It’s something we really need to work on,” Mr. Fitzgerald said. “We want everybody to pay their fair share.”

http://www.post-gazette.com/stories/local/region/allegheny-county-puts-nonprofits-on-notice-671520/

Boustany Announces Hearing on Public Charity Organizational Issues, Unrelated Business Income Tax, and the Revised Form 990

alicia.baker — Tue, 24 Jul 2012 16:05:22 +0000

A second hearing on tax-exempt organizations will occur on July 25, 2012. Per the Ways and Means Committee website:

“The hearing will focus on organizational and compliance issues related to public charities, including the increased complexity of public charity organizational structures, the rules governing profit-generating activities giving rise to unrelated business income tax, and whether the newly redesigned Form 990 is promoting increased compliance and transparency.”

In the announcement, Boustany makes the following oversight comment:

Given the size and scale of the operations of public charities, which in 2008 had over $2.5 trillion in assets, it is critical that the Subcommittee continue its review of the tax-exempt sector. Indeed, over the last two decades, the organizational structures of public charities have become increasingly complex, creating compliance and transparency issues. This hearing is an excellent opportunity for the Subcommittee to hear from the IRS and experts in the tax-exempt community. Their insight will allow the Subcommittee to better understand what is driving organizational complexity, and to learn about the new compliance efforts by the IRS and the UBIT rules.

http://waysandmeans.house.gov/News/DocumentSingle.aspx?DocumentID=303615

Tax-Exempt Organizations the Focus of Upcoming Congressional Hearings

alicia.baker — Fri, 11 May 2012 19:49:08 +0000

Congressman Charles W. Boustany Jr., MD (R-LA), Chairman of the Subcommittee on Oversight of the Committee on Ways and Means, announced that the Subcommittee will hold a hearing examining operations and oversight of tax-exempt organizations. This will be the first in a series of hearings by the Subcommittee on the tax-exempt sector and IRS oversight of tax-exempt activities.

http://waysandmeans.house.gov/News/DocumentSingle.aspx?DocumentID=294777

Tax-Exempt Organizations Section of the IRS: 2011 Annual Report and 2012 Work Plan Released

alicia.baker — Tue, 14 Feb 2012 17:11:15 +0000

The Tax-Exempt and Government Entities section of the IRS recently released its 2011 annual report and 2012 work plan. The report provides that the IRS performed traditional examinations on 11,699 returns from tax-exempt organizations. The IRS performed compliance checks on 3,194 returns from tax-exempt organizations. A few highlights from the IRS’s 2012 work plan include:

(1) continuing the automatic revocation of tax-exempt organizations that do not file an information return for three consecutive years;

(2) a review of organizations who self-declare that they are tax-exempt under sections 501(c)(4), (5), and (6);

(3) continued enforcement of tax law rules relating to political campaigns and campaign expenditures;

(4) a review of organizations that report unrelated business activities on Form 990, but have not filed a Form 990-T;

(5) an examination of tax-exempt organizations that operate overseas to ensure those activities are consistent with the organization’s charitable purpose; and

(6) the continued examination of colleges and universities to ensure compliance (previously blogged about here).

The Fight Over a Coffee House

alicia.baker — Thu, 19 Jan 2012 16:07:11 +0000

The Lake Erie College of Osteopathic Medicine (“LECOM”) owns a new coffee shop, a portion of which is open to the public and the remaining space is a study center exclusively for the students of LECOM. The Erie County Assessor has “accounted for the building’s dual nature” and has split the coffee shop for tax purposes. The portion of the coffee shop that is for the public was found to be taxable, the remaining space for the LECOM students only was found to be tax-exempt. LECOM plans to fight the taxable assessment portion of the coffee shop.

The full article can be found at: http://www.goerie.com/article/20120116/NEWS02/301169960/Erie-County-assessor-splits-coffee-house-for-tax-purposes.

AARP Still Being Questioned by Congress

alicia.baker — Sat, 14 Jan 2012 03:12:35 +0000

It appears that the widely known tax-exempt organization AARP is still being looked at by members of Congress. In a recent letter to Douglas Shulman, the IRS Commissioner, the relationship between HearUSA, Inc. (a hearing aid company) and AARP was questioned by Dave Reichert (member of Congress), Wally Herger (Chairman of the Subcommittee on Health), and Charles Boustany, Jr. (Chairman of the Subcommittee on Oversight). In 2008, AARP entered into a contract with HearUSA that provided that AARP would be paid a “royalty fee” for each hearing aid sold and HearUSA. Purportedly, AARP has collected more than $660,000 in “royalty fees” under the agreement. The letter questions whether the royalty payments are unrelated business income. The letter goes on to question AARP’s relationship with United (a health-insurance provider) and whether AARP is actually involved in the for-profit’s business operations, going so far as to allege that AARP is actually a for-profit business operating under the cover of its tax-exempt status.

The letter referenced above is found at: http://waysandmeans.house.gov/UploadedFiles/Letter_to_IRS-Shulman_12-15-11.pdf.

Tax-Exempt Organizations that Choose to Campaign

alicia.baker — Tue, 10 Jan 2012 21:40:58 +0000

In a recent article by the Nonprofit Times, the IRS’ action (or inaction) when it comes to tax-exempt organizations that endorse or campaign for certain political candidates is discussed. The article highlights the president of Catholic Answers (a religious tax-exempt organization) who posted an “e-letter” on their website questioning whether Sen. John Kerry should receive communion at Mass because of his support of abortion. In response to the “e-letter” the IRS levied a small excise tax (totaling $102.23); however, when Catholic Answers contested the decision in court the IRS refunded the money. Over 250 tax-exempt organizations have been investigated by the IRS because of political activity during the 2004, 2006, and 2008 election years. The investigation resulted in 7 of those organizations losing their tax-exempt status.

The article can be found at: http://www.thenonprofittimes.com/article/detail/electing-to-campaign-the-irs-is-watching-4312.

IRS Survey

alicia.baker — Tue, 20 Dec 2011 16:20:44 +0000

The IRS has announced that they will be sending some tax-exempt organizations a survey related to the expense and amount of time needed to file required tax returns. The exempt organizations have been selected at random and the participation is voluntary. It is unclear what the results of the survey will affect, if anything, with regards to the required filings for tax-exempt organizations.

A copy of the letter and the survey can be found at: http://www.irs.gov/taxstats/charitablestats/article/0,,id=237673,00.html.

IRS Extends Filing Deadlines

alicia.baker — Tue, 20 Dec 2011 16:18:19 +0000

The IRS recently announced that tax-exempt organizations that have a January or February filing due date will have until March 20, 2012 to file their annual returns. Those organization that have obtained a three-month filing extension and have an annual return due on January 17^th or February 15^th of 2012, will also have until March 20, 2012 to file their annual return.

The extension of time is being given because the e-file system that processes electronically filed annual returns will be off-line during January and February.

The full IRS announcement can be found at: http://www.irs.gov/newsroom/article/0,,id=251322,00.html

Small Business Health Care Tax Credit Available to Exempt Organizations

alicia.baker — Thu, 22 Sep 2011 16:13:18 +0000

In a recent IRS news release, the Service reminded small businesses to review the Small Business Health Care Tax Credit to see if they are eligible. The credit is aimed at helping “tax-exempt organizations that primarily employ 25 or fewer workers with an average income of $50,000 or less.” The tax credit is generally available to small exempt organizations who “pay at least half of the premiums for employee health insurance coverage under a qualifying arrangement.” The maximum amount of the credit is worth up to 25% of the exempt organization’s premium costs.

The IRS News Release can be found at: http://www.irs.gov/newsroom/article/0,,id=245334,00.html.